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It was then the largest merger-acquisition operation in the modern financial history of Egypt. In September 2002, the Netherlands group Heineken announced that it had just obtained the agreement of the Egyptian market authorities to make a bid for 100 % of the shares of the National brewer, the Al Ahram Beverage Company (ABC). The offer, which valued ABC at 287 million dollars, was to be successful. |
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The Dutch Heineken company brews 100 million litres of malted drinks every year |
Al Ahram Beverage, created in 1897 and privatised in 1997, employed nearly 4,000 people and had a turnover of 105 million dollars. It is still nowadays the market leader in beer (Al-Ahram’s Stella and Al Gouna’s Sakkara brands) and alcohol-free malted drinks. The group also commands strong positions on the wine market, on distilled beverages and certain soft drinks. The constitution of a serious challenger, EIBCO, by local investors, in October 2005, with the ambition of offering a similar product under its brand for each of ABC’s references, has quite stimulated competition in a local market little fought for until then.
For the Netherlands group, this new acquisition completed its development in the Arab world (a site in Lebanon with the Almaza brewery and in Morocco), and marked its return to Egypt, forty years after having pulled out of the country. The « Green Giant » has acquired a new place as leader in the main Arab-Muslim market and would especially like to develop the Fayrouz brand (alcohol-free beer) in other countries in the region, as well as in Africa.
Heineken is also counting upon this acquisition to substitute its own brands for those produced locally by ABC for the account of Carlsberg or Löwenbrau. The objective: to supply the tourist areas of the country and the Western consumer.
For ABC, which kept its name, its brands and its directors, the arrival of the international group provided it with new commercial capabilities at a moment when the market is developing strongly but when the sources of finance are rare, especially because of the poor image of the alcohol sector in any Muslim country. |
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